lmg reduces capital costs

23 July 2012, Sydney Australia: Latrobe Magnesium Limited (ASX:LMG) has
substantially reduced the capital costs of its first commercial magnesium plant in
Victoria’s Latrobe Valley from $100 million to $35-40 million.
The reduction is due to a reduced size of its first commercial plant from 10,000
tonnes to 5,000 tonnes of magnesium metal per annum. It is also due to the
confirmatory and optimisation work over the past six months.
The test work has also indicated a decrease in plant operating costs by about 10%.
LMG’s prefeasibility study identified a number of process assumptions that needed to
be confirmed with subsequent hydromet and retort test work. LMG has named this
work the adjustment study.
The highlights of this test work completed to date, which have led to reduced capital
and operating costs may be summarised as follows:
• reduced size of tanks used in the hydromet circuit due to less reaction time of
chemicals
• less reagents used in the hydromet process
• increase in the removal of iron, up from 55% to 74%, producing savings in
reductant costs
• improved MgO content achieved in retort feed stock increasing productivity
• reduced size of the thermal reduction process.
This work has been responsible for the reduction in the capital cost estimate of its
10,000 tonne plant from $100 million to between $65 million to $70 million.
The full results of the adjustment study will be announced upon its completion.
LMG believes that with support from both state and federal governments, banks and
its stakehold